Common use of Face Amount Decrease Clause in Contracts

Face Amount Decrease. You may decrease the Face Amount by Written Request, subject to these limits: • Only one decrease per policy year is allowed. • A decrease during the first policy year is not allowed. • The amount of the decrease must be at least $10,000. • The Face Amount remaining after a decrease must be at least $1000 and the Total Face Amount remaining after a decrease must be at least $100,000. The effective date of the decreased Face Amount will be the first Monthly Payment Date on or next following the date we receive the Written Request and have approved it. We recommend you consult your tax advisor before requesting a decrease in Face Amount. Upon approval of any decrease, we will send you a Supplemental Schedule of Coverage, which will include the decreased Face Amount and the effective date of the decrease. If there are Coverage Layers with different effective dates, the Coverage Layers will be decreased or eliminated in the following order: • first, the most recent Coverage Layer; • next, other Coverage Layers, in the reverse order in which they arose; and • finally, the initial Coverage Layer. The request for a decrease in the Total Face Amount will be subject to the Guideline Premium Limit (if applicable to your policy) as defined in the Code. This may result in one or more refunds of premiums or required distributions of Accumulated Value in order to maintain compliance with such limit, or both. Such request will not be allowed to the extent the resulting Guideline Premium Limit would cause an amount in excess of the Net Cash Surrender Value to be distributed from the policy.